Tom McLeod: Make the most of slower times

CHICAGO. Tom McLeod, president & CEO of McLeod Software, officially opened the 21st annual McLeod User Group meeting yesterday morning with an overview of the industry and some specific advice for carriers about how to make the most of what appears to be a slower economic recovery

CHICAGO. Tom McLeod, president & CEO of McLeod Software, officially opened the 21st annual McLeod User Group meeting yesterday morning with an overview of the industry and some specific advice for carriers about how to make the most of what appears to be a slower economic recovery.

“Is the glass half empty or half full?” he asked the packed general session. “We are seeing some companies doing very well - not booming, but doing well. We are also seeing some soft spots. The current economy may be as good as it gets for the next couple of years. So where will your best profit opportunity in the next year come from? A boom with higher rates? Getting more efficient? Diversifying?”

Diversifying, according to McLeod, is a trend that has lasted about five years.

“I expect this trend to continue,” he told the audience, “but I want to offer one cautionary note: When you decide to diversify, don’t do it half way. Don’t dabble. Jump in with both feet. Make a full commitment.”

Concerning the driver shortage, McLeod noted that things are “a little tight now,” but nowhere near the crisis level predicted when the recovery seemed to be stronger. Still, he encouraged carriers to work to make their companies places that attract and keep good drivers. “The one thing that is the most attractive to drivers is a company that is doing well,” he said.

See related McLeod stories from the 21st annual McLeod User Group meeting

Like other industry observers, McLeod noted that he keeps an eye on manufacturing, which has been carrying the economy forward, and on housing, which may be beginning a recovery—perhaps out of sight of the popular press.

“I just hope all the negative news [we get] does not become a self-fulfilling prophesy,” he said, “causing us to hesitate.”

It has also been a period of increased regulation, and McLeod made it clear that he sees a role for regulation—when necessary. “However, the executive branch is still controlled by people who think regulations are good for you…” he added.

Hours of service (HOS) and EOBR regulations have been delayed, but still do appear to be on the way, McLeod said. “Reports we are hearing from fleets already using EOBRs are very positive.”

Speaking what he called “off script,” McLeod noted that, “Almost every company has the opportunity to do better and to help make our country better and our world better,” and he encouraged those in the audience to do just that. “We have to do an excellent job every day,” he said. “We have to treat people with dignity and respect—to do the right things in the right way.”

To further that goal, McLeod offered a list of ideas for fleets trying to prevail in today’s uncertain environment:

Get much better at understanding your lanes. Get a better look at what is going on and make changes as necessary.

Understand all your real costs. This includes costs for special services like pallet exchanges.

Understand your profitability.Decide which customers you should keep.

Measure and coach your people. People want to know when they are doing a good job.

Drive down non-value-added activity.Use automation and managing by exception to do thing like monitor out-of-route miles.

Look for places where you have waste, such as empty miles.

Be effective in collecting fuel surcharges and other charges.

Maximize utilization of drivers and support your drivers. This includes:

Using available tools to plan and manage home time better.

Managing HOS in dispatch to help drivers by not assigning jobs they can’t legally do. It means being better planners.

Managing detention.

Letting your drivers know where they stand. Letting them know what doing well means within your company—what it equals. Taking time to meet with them on a regular basis and providing feedback.

Lest all these suggestions overwhelm, McLeod encouraged fleets to “Bring these capabilities online one step at a time. You can’t do it all at once,” he said. “It will take time, maybe several months…Prioritize your initiatives and plan to do two to three major improvements by this time next year. We can’t do it for you, but we can do it alongside you. We can help you get there.”

When it comes to “getting there,” McLeod Software has apparently been following its own advice. Tom McLeod reported that 2010 was a record year for the company in terms of business and that 2011 will be even better. The company has added almost 50 people and now employs more than 200, serving more than 600 active customers by the end of the year.

“We are the largest company that exclusively serves transportation with a single platform,” McLeod noted. “This has allowed us to accelerate innovation and development. It has made it easier to do upgrades.”

In a follow-up press conference, Tom McLeod had the opportunity to expand on the topics of the general session. Concerning the company’s growth, he added that, “Part of what we are enjoying is from pent-up demand, but we had made a well-timed move into brokerage, logistics and LTL and our freight management has added to the business.”

Reflecting on the current slow recovery, McLeod observed that, “When the economy booms, business actually goes down. Companies can get sloppy [because there is no time to pay attention to the details.] The slow growth mode is actually a lot healthier for a company.”

Overall, McLeod had high praise for today’s fleets, noting that, “Management teams are getting smarter and better…Companies growing and doing well are using the information they have to do better.”

The growth in the use of mobile devices is a hot topic these days and McLeod said, “I foresee a lot more interaction from these types of devices. Thanks to truck-mounted systems with blue tooth capability, you can sync up handhelds with in-cab units, so cell phones and tablets could [eventually] replace cab-mounted units [in some applications]” he noted. McLeod’s own mobile applications, introduced a year ago, have been intentionally focused on the needs of the mobile executive, he added, rather than on the driver.

For the future, the company is especially interested in business process management and employee monitoring, according to McLeod. “Extending business analytics and workflow capabilities may or may not be related to documents management,” he noted, adding that in the next couple of years, the focus will be on improving productivity for customers.

“These days, when people say analytics, they mean concise and actionable information,” he said. “We have a large initiative underway now to help customers with strategic initiatives to get the right metrics back [to measure their progress and guide them going forward].

“Set your sails for the way the wind is blowing,” McLeod advised when asked about the current business environment. “It is very little good complaining about the wind.”